Settlement Banishes Ill Will Over Hospital Change

KINGSLEY GUY Editorial Page Editor

A year ago, Holy Cross Hospital was embroiled in a controversy that pitted the Sisters of Mercy against some of the most influential people in Broward County.

The ill will was palpable, and it looked like the only way the disagreement would be resolved was through a protracted legal battle that would cost a fortune and damage the reputation of one of the county's most important health care institutions.

Well, this is a story with a happy ending. The controversy was resolved out of court, most of the ill will has dissipated, and the future of Holy Cross looks very bright, indeed. The amicable settlement of what once seemed to be an intractable controversy speaks well to the integrity of all those involved.

Ground was broken for Holy Cross in 1953, after public-spirited citizens approached church officials and promised to raise money for a Catholic hospital to serve rapidly-growing Broward.

Millions of dollars in private donations were channeled into the hospital, located off Federal Highway and Commercial Boulevard. The institution's growth was aided by tax-free bonds backed by the county.

Everything went along smoothly for years, and nobody needed to ask the question of whether the hospital was a community-owned asset operated by the Sisters of Mercy, or an asset owned by the sisters that served the community, but also the larger interests of the holy order.

In the mid 1980s, however, that question started to gain significance. The Sisters of Mercy were not attracting enough new members to assure that they could continue operating Holy Cross. Also, financial pressures in the changing health care industry made it imperative that Holy Cross affiliate with a hospital chain.

In 1986, the Board of Trustees approved Holy Cross joining the Eastern Mercy Health Care System, a hospital association operating under the auspices of the Sisters of Mercy. This would assure professional management well into the future, and also provide economies of scale that could reduce operating expenses at Holy Cross.

But the board, some of whose members had been around from the start and had contributed hundreds of thousands or even millions of dollars to the hospital, was uneasy about the affiliation. Most of the EMHC hospitals were in the Northeast, and not all of them were as financially sound as Holy Cross. The board worried, with justification, that Holy Cross assets would be raided to shore up the finances of some far-away institution, so it reserved the right to withdraw from the system.

"We recognized there were tremendous advantages to being part of a hospital group," says businessman Fred R. Millsaps, former chairman of the Board of Trustees. "This just wasn't the right group."

Tensions mounted, as did the intrigue. Without the board's knowledge, the nuns changed the EMHC bylaws so a hospital could not leave the affiliation unless all hospitals agreed. Some of the trustees responded by getting the Legislature to pass a measure they hoped would prevent their ouster from the board.

The sisters considered the law to be unconstitutional, and in July 1996 fired the old board and appointed a new one. This precipitated legal action on the part of 18 of the 23 board members who so unceremoniously had been cashiered. They sued for reinstatement, and also to keep Holy Cross money from being used to finance other hospitals in the chain.

What a mess. The sisters were locked in an internecine struggle with board members who had spent careers at the highest level of the business world, and who were accustomed to getting their way. The battle was joined, and the case headed into the civil justice system, where even winners end up losers when the legal bills are finally tallied.

Slowly, though, things began to change. Attorney General Bob Butterworth looked into the situation, and provided a mediating influence. The Sun-Sentinel editorial page came forward with what we think was sage advice. Some of the cooler heads on the old and new boards began talking to each other, and the sisters began moderating their views.

In a letter to Butterworth, the sisters pledged not to transfer Holy Cross assets out of Broward, to maintain a local board of directors, and to invite back several members of the fired board. Millsaps, Walter L. Banks, Robert A. Steele and David Rush all agreed to return, and they again are helping to direct hospital policy.

Holy Cross now is a member of an association of 50 hospitals and long-term care centers called Catholic Health East. The Eastern Mercy system is a part of it, but Catholic Health East also has a heavy presence in the Southern United States, including a half dozen institutions in Florida.

Holy Cross money could be used to help affiliated institutions, but only through loans with so many strings attached that Holy Cross would not lose money.